Private school funds near cap

By D. Aileen Dodd

The Atlanta Journal-Constitution

A tax credit that pays for some Georgia students to switch from public to private schools is nearing its $50 million cap as more private campuses sign up and actively seek contributions that are then subtracted from the donors’ state taxes.

Wesleyan School in Norcross’ efforts with the Georgia Tax Credit Program saw funding soar by 70 percent in 2010 to $850,000. At Pace Academy in Atlanta, a multimedia campaign helped bring in $747,984, a 23 percent jump.

Even some private schools that were reluctant to take redirected public money when the program began have since signed on, in part, because of the poor economy.

But the same economic reality is also motivating the program’s opponents. More convinced in the recession’s aftermath than they were in 2008 when the program began, they say it will “starve” public schools that are fighting for every dollar they can get.

While Gov. Nathan Deal’s proposed k-12 public school budget for 2012 would rise slightly — by $5 million to $6.994 billion over 2011 — it will come after a two-year period when public schools absorbed more than $500 million in cuts.

Georgia revenue officials said last week preliminary figures show $40.4 million in the private school tax credits were pre-approved in 2010. Georgia’s leading student scholarship organizations, which are also still processing contributions, say that figure is closer to $45.5 million, up from $6.2 million in 2008 and $25.4 million in 2009.

Supporters tout choice

Some school choice advocates rallying on the Capitol steps last week called for lawmakers to raise the program’s cap by $10 million to $60 million. They say the scholarships, awarded to more than 5,000 students statewide, have opened the doors of prestigious private institutions to students in search of academic rigor or campuses that specialize in special needs.

For private schools, the tax credit has become a gift horse they can’t pass up. Some use the new money to bring in low-income students, while using their other scholarship funds to help current students’ struggling families.

“This allows us to offer aid where we hadn’t in the past,” said Elaine Dorr, annual fund director for the Wesleyan School. “The program has raised awareness that there are options out there. I get phone calls from parents inquiring about coming to the school. They really can see that a private education is possible for their children.”

Holy Innocents Episcopal School just signed up in 2010 and raised more than $244,300 last year.

“It’s still a little of bit of a tricky idea, in our opinion, to have state funding ultimately channeled to independent schools, but we are a little bit more comfortable with it,” said Chris Pomar, Holy Innocents admissions and financial aid director. “It got to the point that we were one of the only schools not participating. We would like to be able to stay competitive with our peer schools that offer increased aid because of the funding. A lot of our parents were asking, ‘Why aren’t we able to have this program?’”

The tax credit passed mostly along party lines in 2008 with Democrats saying it was “dangerous” for public schools and Republicans siding with school choice advocates. But now that millions in federal stimulus funds that supported public schools have dried up, and with a state school budget down half a billion dollars since 2009, some say the tax-credit scholarship has run its course.

“Our experiment with the tax credit has gone as far as it needs to go,” said State Rep. Mary Margaret Oliver, D-Decatur. Oliver said the tax credit does not help the long-term stability of public schools. “I don’t believe that this continued push for taxpayer money to go to private institutions helps public education.”

The program’s attributes

Proponents, however, point out the program’s value: It provides educational options, helps private schools meet diversity goals and saves money for public schools at the same time.

“We are very much in favor of this as are the 106 schools that work with us, the 11,000 taxpayers that have contributed to us and the 3,000 families that have received scholarships from us,” said Lisa Kelly, president of Georgia GOAL Scholarship Program, the largest nonprofit student scholarship organization. “Georgia families are seeking better opportunities for their children in k-12 education.”

Donors receive dollar-for-dollar state tax credits for their gifts, which are first approved by the state. Donations are earmarked for use by specific schools. Maximum contributions are $1,000 for an individual and $2,500 for a couple; corporations can claim up to 75 percent of their tax liability. Donations pass through one of more than 30 nonprofits, including Georgia GOAL, that partner with private schools and award scholarships that follow students through graduation.

“We are finding that from year to year, the boards of these schools are raising their game,” Kelly said. “They are spreading the word. And as people understand what this is about, they participate in greater and greater numbers.”

Pinney Allen, head of The Atlanta Girls’ Schools, said she advocates for strong public schools but she also believes parents need choices.

“Finding ways to support education regardless of [a student’s] economic background is important,” Allen said. “This is one tool that is helping schools like us help students.”

Under Georgia law, there is no household income limit for the award. The only criteria for scholarship recipients is that they attend, or be eligible to begin attending, a public school. The scholarship organizations set voluntary guidelines. More than half of Georgia GOAL’s scholarship recipients, for example, live in households earning less than $36,000 a year.

GRACE Scholars Fund, which funnels tax credit donations to Catholic schools, said 40 percent of its scholarships have gone to single parents and 34 percent to non-Catholics. In 2010, Catholic schools raised $3.5 million for more scholarships, according to the Roman Catholic Archdiocese of Atlanta.

Scholarships also help cover the $29,000 tuition bill for deaf, hearing impaired and dyslexic children attracted to Atlanta Speech School for its specialized programs. Tax-credit donations there rose 161 percent in 2010 to $340,000.

“We want to be within reach of all of the children who need our services,” said Comer Yates, the school’s executive director. “The tax-credit program is critical for us.”

At what cost?

Georgia GOAL’s Kelly said the program actually saves the state money.

Her organization’s average scholarship is for $3,900. Kelly said that saves an average of about $1,200 for each student who leaves the public schools.

“In Georgia, the average cost to educate a child is $5,139 — and that is just the [state] portion,” Kelly said.

But Tim Callahan, spokesman for the Professional Association for Georgia Educators, said the notion that it saves the state money is “not true” and his group will fight an attempt to expand the tax credit.

“If you take two children out of the school bus, do you still need the bus?” Callahan said. “If you take one child out of my classroom, do you still need the teacher? When you hurt state revenues, it hurts public schools.”

Fred Dissen of Flowery Branch, a retired government clerk, said he has serious concerns, as a taxpayer, about the program’s fairness.

“If I take that as a tax deduction then my fellow citizen has to make up the amount of tax that I didn’t pay,” Dissen said.

“I think that is unfair. That is just subsidizing a private school.”

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Paying for private education

How much several metro Atlanta schools gained from the program in 2010:

Wesleyan School: $850,000

Pace Academy: $747,984

Woodward Academy: $216,000

Covenant Christian Academy: $85,500

Holy Innocents Episcopal: $244,300

Atlanta Speech School: $340,000

The Atlanta Girls’ Schools: $160,000